China’s top climate official has ruled out any immediate introduction of carbon futures as well as a carbon tax to help the country finance efforts to cut climate-warming greenhouse gases, the official China News Service reported late on Tuesday, reports Reuters.

“In the initial stage we will not do carbon futures, because we are worried that suddenly entering the futures market with no experience could cause chaos in the market,” said Xie Zhenhua, China’s special representative on climate change, speaking at a briefing on the sidelines of climate talks in Bonn.

China, the world’s biggest source of CO2, has vowed to use “market mechanisms” to help reduce emissions.
Xie said carbon trading must not lose sight of its core purpose of controlling emissions, and should avoid “overinvestment” and the use of too many derivative products.

China has already set up seven pilot regional carbon trading platforms and was due to launch a nationwide exchange this year. Xie said preparations have been completed and the scheme was awaiting cabinet approval.

China has considered a pilot carbon futures trading exchange in the southern coastal province of Guangdong, according to previous state media reports. China’s securities regulator has also conducted studies into the feasibility of allowing trade in carbon futures contracts.